Bloomberg announced on Wednesday that the Ivory Coast suspended taxes on imported rice in a bid to prevent consumer prices from rising, while neighboring Mali extended a similar subsidy. In the meantime Ghanaian consumers are left in the dark and reeling under an oppressive cost of living as the Government show no sign of budging.
According to Bloomberg Ivory Coast scrapped import tariffs on rice for three months, a measure that will cost the government 7 billion CFA francs ($13 million). The people of the Ivory Coast consumes 1.6 million metric tons a year, while it produces only 600,000 tons. This ratio of import dependency is very similar to Ghana’s dependency ratio of 70%.
It was also announced that Mali extended a subsidy on import taxes for the staple food by two weeks until Aug. 20 according to an announcement by Commerce Minister Ahmadou Toure.
Food Security Ghana (FSG) has been following the rice saga in Ghana for a number of years and has been reporting extensively on the issue.
Concerns about Ghana’s food security policy started emerging when the government re-introduced a 20% import levy on rice and other basic foodstuffs in 2009 after the previous government abolished the levy amidst the 2007 – 2008 food crisis to support consumers.
The re-introduction was motivated based on the grounds that the food crisis was over and because it was necessary to protect local production in Ghana’s quest to become self sufficient.
Both these arguments were shown as unsubstantiated and indeed somewhat deceitful.
In the same month that the import levies were re-introduced the World Bank warned the world that a new food crisis was emerging, an announcement that rubbished the budget speech statement that the food crisis was over.
The argument that the import levies were essential to protect local rice producers has also been rubbished by many analysts. Ghana’s 70% dependence on rice imports was proved to be a result of low quality, low productivity, and underinvestment in both agricultural support and agricultural research by the Ghanaian government.
The reintroduction of the import levies only resulted in creating a huge gap between import duties in the Ivory Coast of 12.5% compared to the 37% in Ghana. This led to massive smuggling of rice on the Western border of Ghana with resultant huge losses to the state and further headaches for local producers.
Import duties and levies is a policy tool that must be used in the best interest of both consumers and producers. When a country is 100% self sufficient high import duties of up to 70% as in India can easily be justified. This, however, does not hold for a country such as Ghana that is 70% dependent on imports.
At a stage when the Indian government realised that local production was going to result in a shortfall it scrapped its 70% import duties in order to protect its consumers from inflated import prices of rice.
MOFA (Ministry of Food and Agriculture) under the leadership of Mr. Kwesi Ahwoi and backed by the late President Mills has been dogged in its quest for self sufficiency of rice supply in Ghana.
This has resulted in various broken promises about changes in the import ratio and the levels of self sufficiency, and expectations are that Ghana will still be 70% dependent on rice imports by the close of this year.
FSG has repeatedly advocated that self sufficiency and food security are two totally different issues. This was eventually accepted and recognised by the government.
The plight of the majority of Ghanaians who are in a battle for survival has further been given a devastating blow due to the massive weakening of the Ghanaian cedi to the US Dollar. In the past year the cedi slipped from a low of 1.5138 to a high of 1.9715. This depreciation has had devastating impacts on the cost of living for Ghanaians.
With general elections looming in Ghana and major turmoil within party ranks of the ruling NDC (National Democratic Congress), worsened by the untimely death of President John Evans Atta Mills, Ghanaians will be looking with great interest what the government’s next move is after the caring gestures by its West African neighbours.